NMI Holdings, Inc. Reports Second Quarter Net Income of $2

EMERYVILLE, CA--(Marketwired - August 02, 2016) - NMI Holdings, Inc. (NASDAQ: NMIH) today reported net income of $2.0 million, or $0.03 per share, for the second quarter ended June 30, 2016. This compares with a net loss of $3.9 million, or $(0.07) per share, in the prior quarter and a net loss of $10.4 million, or $(0.18) per share, in the second quarter of 2015. Total revenue for the quarter was $29.6 million, up 33% from $22.2 million in the prior quarter and up 171% from $10.9 million in the second quarter of 2015.

The company also announced today that it has entered into a quota share reinsurance agreement with a panel of third-party reinsurance providers. The company expects that Fannie Mae and Freddie Mac will allow full credit under the Private Mortgage Insurer Eligibility Requirements (PMIERs) for risk ceded under the agreement.

Bradley Shuster, chairman and CEO of National MI, said, "In the second quarter we achieved GAAP profitability, a significant milestone for this young company just three years after writing our first mortgage insurance policy. It is a reflection of our dedication to customer service, our disciplined approach to account development, and diligent management of both risk and expenses. We are grateful to our customers for their belief in us, our employees for their hard work and loyalty, and our shareholders and other business partners for their support of National MI since its founding. We are at an exciting inflection point in our development as we now have visibility to rapid earnings growth for many years to come. Looking ahead, we now expect to report pre-tax income of $7 to $10 million for the full year 2016, and are reaffirming our guidance for pre-tax income of at least $60 million in 2017."

As of June 30, 2016, the company had primary insurance-in-force of $23.6 billion, up 27% from $18.6 billion at the prior quarter end and up 229% over $7.2 billion as of June 30, 2015.
Premiums earned for the quarter were $26.0 million, up 31% from $19.8 million in the prior quarter and up 194% over $8.9 million in the same quarter a year ago.
Total NIW of $5.8 billion in the second quarter was up 37% over $4.3 billion in the prior quarter and up 129% over $2.5 billion in the second quarter of 2015.
Monthly premium NIW was $3.7 billion, an increase of 49% over $2.5 billion in the prior quarter and an increase of 153% over the second quarter of 2015. Single premium NIW of $2.1 billion was up 21% from the prior quarter and up 96% compared with the same quarter a year ago.
Total underwriting and operating expenses in the second quarter were $23.2 million, including share-based compensation expense of $1.8 million. This compares with total underwriting and operating expenses of $22.7 million, including $1.4 million of share-based compensation, in the prior quarter, and $20.9 million, including $2.1 million of share-based compensation, in the same quarter a year ago.
Loss expense for the quarter was $0.4 million, resulting in a loss ratio of 1.8%.
As of the end of the second quarter, the company had approved master policies in place with 1,061 customers, up from 1,023 as of the end of the prior quarter, and up from 842 as of the end of the second quarter of 2015. Customers delivering NIW in the quarter grew to a new high of 518, which compares with 469 in the prior quarter and 340 in the same quarter a year ago. On an ever-to-date basis, customers delivering NIW grew to 649.
At quarter-end, cash and investments were $654 million, including $78 million at the holding company, and book equity was $422 million, equal to $7.14 per share. This book value excludes any benefit attributable to the company's deferred tax asset of approximately $66 million as of Dec. 31, 2015.
At quarter-end, the company had total PMIERs available assets of $432 million, which compares with risk- based required assets under PMIERs of $377 million.


		Quarter			Quarter			Quarter
		Ended			Ended			Ended		Growth		Growth
		6/30/2016			3/31/2016			6/30/2015		Q/Q		Y/Y
Primary Insurance-in-Force ($billions)			23.62			18.56			7.19	27	%	228	%
New Insurance Written - NIW ($billions)
	Monthly premium		3.70			2.49			1.46	49	%	153	%
	Single premium		2.14			1.76			1.09	21	%	96	%
	Total		5.84			4.25			2.55	37	%	129	%
Premiums Earned ($millions)			26.04			19.81			8.86	31	%	194	%
Underwriting & Operating Expense ($millions)			23.23			22.67			20.91	2	%	11	%
Loss Expense ($millions)			0.47			0.46			-	3	%	-
Loss Ratio			1.8	%		2.3	%		-
Cash & Investments ($millions)			654			630			434	4	%	51	%
Book Equity ($millions)			422			410			412	3	%	2	%
Book Value per Share		$	7.14		$	6.94		$	7.01	3	%	2	%
Approved Master Policies			1061			1023			842	4	%	26	%
Customers Generating NIW			518			469			340	10	%	52	%

Reinsurance Agreement
Effective Sept. 1, 2016, the company's quota share reinsurance agreement covers the following components of its portfolio, subject to certain limitations and conditions:

Approximately 23% of existing policies written as of Aug. 31, 2016.
Approximately 95% of the company's pool agreement with Fannie Mae.
Approximately 23% of policies written from Sept. 1, 2016 through Dec. 31, 2017.

National MI will receive a 20% ceding commission for ceded premiums related to this transaction, as well as a profit commission provided that the loss ratio on the loans covered under the agreement generally remains below 60%. For risk ceded under the agreement, the implied after-tax cost of capital over the term of the transaction is expected to be approximately 3%.

Conference Call and Webcast Details
The company will hold a conference call and live webcast today at 1:30 p.m. Pacific Time / 4:30 p.m. Eastern Time. The webcast will be available on the company's website, www.nationalmi.com, in the "Investor Relations" section. The call also can be accessed by dialing (888) 734-0328 in the U.S., or (914) 495-8578 for international callers using Conference ID: 40158937, or by referencing NMI Holdings, Inc.

About National MI
National Mortgage Insurance Corporation (National MI), a subsidiary of NMI Holdings, Inc. (NASDAQ: NMIH), is a U.S.-based, private mortgage insurance company enabling low down payment borrowers to realize home ownership while protecting lenders and investors against losses related to a borrower's default. To learn more, please visit www.nationalmi.com.

Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this press release or any other written or oral statements made by or on behalf of the Company in connection therewith may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (Securities Act), Section 21E of the Securities Exchange Act of 1934, as amended (Exchange Act), and the U.S. Private Securities Litigation Reform Act of 1995 (PSLRA). The PSLRA provides a "safe harbor" for any forward-looking statements. All statements other than statements of historical fact included in or incorporated by reference in this release are forward-looking statements, including any statements about our expectations, outlook, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance. These statements are often, but not always, made through the use of words or phrases such as "anticipate," "believe," "can," "could," "may," "predict," "assume," "potential," "should," "will," "estimate," "plan," "project," "continuing," "ongoing," "expect," "intend" and similar words or phrases. All forward-looking statements are only predictions and involve estimates, known and unknown risks, assumptions and uncertainties that may turn out to be inaccurate and could cause actual results to differ materially from those expressed in them. Many risks and uncertainties are inherent in our industry and markets. Others are more specific to our business and operations. Important factors that could cause actual events or results to differ materially from those indicated in such statements include, but are not limited to: our ability to implement our business strategy, including our ability to attract and retain a diverse customer base and to achieve a diversified mix of business across the spectrum of our product offerings; changes in the business practices of the GSEs that may impact the use of private mortgage insurance; our ongoing ability to comply with the financial requirements of the PMIERs; our ability to maintain sufficient holding company liquidity to meet our short- and long-term liquidity needs; our ability to successfully execute and implement our capital plans, including our ability to enter into, and receive approval of, reinsurance arrangements on terms and conditions that are acceptable to us and to the GSEs; heightened competition for our mortgage insurance business from other private mortgage insurers and the FHA; adoption of new or changes to existing laws and regulations or their enforcement and implementation by regulators; changes to the GSEs' role in the secondary mortgage market or other changes that could affect the residential mortgage industry generally or mortgage insurance in particular; potential future lawsuits, investigations or inquiries or resolution of current lawsuits or inquiries; emergence of unexpected claims and coverage issues, including claims exceeding our reserves or amounts we expected to experience; our ability to utilize our net operating loss carryforwards, which could be limited or eliminated in various ways, including if we experience an ownership change as defined in Section 382 of the Internal Revenue Code; and general economic downturns and volatility. These risks and uncertainties also include, but are not limited to, those set forth under the heading "Risk Factors" detailed in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2015, as subsequently updated through other reports we file with the SEC. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. We caution you not to place undue reliance on any forward-looking statement, which speaks only as of the date on which it is made, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information, future events or circumstances that occur after the date on which the statement is made or to reflect the occurrence of unanticipated events except as required by law.

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com



Consolidated statements of operations and comprehensive income
		For the three months ended June 30,						For the six months ended June 30,
		2016			2015			2016			2015
Revenues		(In Thousands, except for share data)
	Net premiums written	$	48,862		$	20,347		$	86,991		$	33,268
	Increase in unearned premiums		(22,821	)		(11,491	)		(41,143	)		(17,476	)
	Net premiums earned		26,041			8,856			45,848			15,792
	Net investment income		3,342			1,688			6,573			3,283
	Net realized investment gains (losses)		61			354			(824	)		967
	Other revenues		37			-			69			-
Total revenues			29,481			10,898			51,666			20,042
Expenses
	Insurance claims and claims expenses		470			(6	)		928			98
	Underwriting and operating expenses		23,234			20,910			45,906			39,259
Total expenses			23,704			20,904			46,834			39,357
Other (expense) income
	(Loss) gain from change in fair value of warrant
	liability		(59	)		(106	)		611			1,142
	Interest expense		(3,707	)		-			(7,339	)		-
Total other (expense) income			(3,766	)		(106	)		(6,728	)		1,142

Income (loss) before income taxes			2,011			(10,112	)		(1,896	)		(18,173	)
	Income tax expense		-			241			-			-
Net income (loss)		$	2,011		$	(10,353	)	$	(1,896	)	$	(18,173	)

Earnings (loss) per share
	Basic	$	0.03		$	(0.18	)	$	(0.03	)	$	(0.31	)
	Diluted	$	0.03		$	(0.18	)	$	(0.03	)	$	(0.31	)

Weighted average common shares outstanding
Basic			59,105,613			58,720,095			59,005,983			58,603,644
Diluted			59,830,899			58,720,095			59,005,983			58,603,644
Loss Ratio⁽¹⁾			2	%		-	%		2	%		1	%
Expense Ratio⁽²⁾			89			236			100			249
Combined ratio			91	%		236	%		102	%		249	%

Net income (loss)		$	2,011		$	(10,353	)	$	(1,896	)	$	(18,173	)
Other comprehensive income (loss), net of tax:
	Net unrealized gains (losses) in accumulated other comprehensive gain (loss), net of tax (benefit) expense of $0 and ($1,431) for the three monthsended June 30, 2016 and 2015, respectively, and $0 for both the six months ended June 30, 2016 and 2015		8,670			(2,205	)		17,771			467
	Reclassification adjustment for losses (gains) included in net loss, net of tax expense of $0 for all periods presented		(61	)		(354	)		824			(967	)
Other comprehensive income (loss), net of tax			8,609			(2,559	)		18,595			(500	)
Comprehensive income (loss)		$	10,620		$	(12,912	)	$	16,699		$	(18,673	)


⁽¹⁾		Loss ratio is calculated by dividing the provision for insurance claims and claims expenses by net premiums earned.
⁽²⁾		Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.



Consolidated balance sheets		June 30, 2016			December 31, 2015
Assets		(In Thousands, except for share data)
	Fixed maturities, available-for-sale, at fair value (amortized cost of $593,807 and $564,319 as of June 30, 2016 and December 31, 2015, respectively)	$	607,318		$	559,235
	Cash and cash equivalents		46,827			57,317
	Premiums receivable		8,868			5,143
	Accrued investment income		3,068			2,873
	Prepaid expenses		1,810			1,428
	Deferred policy acquisition costs, net		25,128			17,530
	Software and equipment, net		19,690			15,201
	Intangible assets and goodwill		3,634			3,634
	Other assets		85			90
Total assets		$	716,428		$	662,451

Liabilities
	Term loan	$	144,107		$	143,939
	Unearned premiums		131,916			90,773
	Accounts payable and accrued expenses		15,502			22,725
	Reserve for insurance claims and claim expenses		1,475			679
	Warrant liability, at fair value		856			1,467
	Deferred tax		137			137
Total liabilities			293,993			259,720
Commitments and contingencies

Shareholders' equity
	Common stock - class A shares, $0.01 par value; 59,128,011 and 58,807,825 shares issued and outstanding as of June 30, 2016 and December 31, 2015, respectively (250,000,000 shares authorized)		591			588
	Additional paid-in capital		573,342			570,340
	Accumulated other comprehensive income (loss), net of tax		11,121			(7,474	)
	Accumulated deficit		(162,619	)		(160,723	)
Total shareholders' equity			422,435			402,731
Total liabilities and shareholders' equity		$	716,428		$	662,451



Historical Quarterly Data		2016						2015
		June 30			March 31			December 31			September 30			June 30			March 31
Revenues		(In Thousands, except for share data)
	Net premiums written	$	48,862		$	38,129		$	45,582		$	35,360		$	20,347		$	12,921
	Increase in unearned premiums		(22,821	)		(18,322	)		(28,702	)		(22,526	)		(11,491	)		(5,985	)
	Net premiums earned		26,041			19,807			16,880			12,834			8,856			6,936
	Net investment income		3,342			3,231			2,078			1,884			1,688			1,596
	Net realized investment gains
	(losses)		61			(885	)		(121	)		(15	)		354			613
	Other revenues		37			32			25			-			-			-
Total revenues			29,481			22,185			18,862			14,703			10,898			9,145
Expenses
	Insurance claims and claims expenses		470			458			371			181			(6	)		104
	Underwriting and operating expenses		23,234			22,672			21,686			19,653			20,910			18,350
Total expenses			23,704			23,130			22,057			19,834			20,904			18,454

Other (expense) income ⁽¹⁾			(3,766	)		(2,962	)		(1,626	)		332			(106	)		1,248

Income (loss) before income taxes			2,011			(3,907	)		(4,821	)		(4,799	)		(10,112	)		(8,061	)
	Income tax expense (benefit)		-			-			-			-			241			(241	)
Net income (loss)		$	2,011		$	(3,907	)	$	(4,821	)	$	(4,799	)	$	(10,353	)	$	(7,820	)

Earnings (loss) per share
	Basic	$	0.03		$	(0.07	)	$	(0.08	)	$	(0.08	)	$	(0.18	)	$	(0.13	)
	Diluted		0.03			(0.07	)		(0.08	)		(0.08	)		(0.18	)		(0.13	)

Weighted average common shares
outstanding
Basic			59,105,613			58,936,694			58,781,566			58,741,328			58,720,095			58,485,899
Diluted			59,830,899			58,936,694			58,781,566			58,741,328			58,720,095			58,485,899

Other data
Loss Ratio ⁽²⁾			2	%		2	%		2	%		1	%		-	%		1	%
Expense Ratio ⁽³⁾			89	%		114	%		128	%		153	%		236	%		265	%
Combined ratio			91	%		117	%		131	%		155	%		236	%		266	%

⁽¹⁾		Other (expense) income includes the gain from change in fair value of warrant liability, gain from settlement of warrants, and interest expense.
⁽²⁾		Loss ratio is calculated by dividing the provision for insurance claims and claims expenses by net premiums earned.
⁽³⁾		Expense ratio is calculated by dividing other underwriting and operating expenses by net premiums earned.



New Insurance Written (NIW), Insurance in Force (IIF) and Premiums

The tables below show primary and pool NIW and IIF, by quarter, for the last six quarters.

Primary NIW	Three months ended
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30 2015		March 31, 2015
	(In Millions)
Monthly	$	3,700	$	2,492	$	2,029	$	1,582	$	1,460	$	919
Single		2,138		1,762		2,518		2,051		1,089		777
Primary	$	5,838	$	4,254	$	4,547	$	3,633	$	2,549	$	1,696

Primary and pool IIF	As of
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30 2015		March 31, 2015
	(In Millions)
Monthly	$	12,529	$	9,210	$	6,958	$	5,087	$	3,617	$	2,259
Single		11,095		9,354		7,866		5,514		3,573		2,576
Primary		23,624		18,564		14,824		10,601		7,190		4,835

Pool		3,999		4,136		4,238		4,340		4,476		4,621
Total	$	27,623	$	22,700	$	19,062	$	14,941	$	11,666	$	9,457



Portfolio Statistics

The table below shows primary portfolio trends, by quarter, for the last six quarters.

Primary portfolio trends							As of and for the quarter ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015			March 31, 2015
	($ Values In Millions)
New insurance written	$	5,838		$	4,254		$	4,547		$	3,633		$	2,549		$	1,696
New risk written		1,411			1,016			1,105			887			615			396
Insurance in force ⁽¹⁾		23,624			18,564			14,824			10,601			7,190			4,835
Risk in force ⁽¹⁾		5,721			4,487			3,586			2,553			1,715			1,146
Policies in force (count) ⁽¹⁾		100,547			79,700			63,948			46,175			31,682			21,225
Weighted-average coverage ⁽²⁾		24.2	%		24.2	%		24.2	%		24.1	%		23.9	%		23.7	%
Loans in default (count)		79			55			36			20			9			6
Percentage of loans in default		0.1	%		0.1	%		0.1	%		-	%		-	%		-	%
Risk in force on defaulted
loans	$	4		$	3		$	2		$	1		$	1		$	-
Average premium yield ⁽³⁾		0.47	%		0.45	%		0.49	%		0.52	%		0.51	%		0.55	%
Annual persistency ⁽⁴⁾		83.3	%		82.7	%		79.6	%		71.6	%		65.5	%		59.2	%

⁽¹⁾		Reported as of the end of the period.
⁽²⁾		End of period risk in force (RIF) divided by IIF.
⁽³⁾		Average premium yield is calculated by dividing primary net premiums earned by average IIF for the period, annualized.
⁽⁴⁾		Defined as the percentage of IIF that remains on our books after any 12-month period.



The tables below reflect our total primary NIW by FICO, LTV, and purchase/refinance mix.


Primary NIW by FICO		Three months ended
		June 30, 2016			March 31, 2016			June 30, 2015
		(In Millions)
	> = 760	$	3,160		$	2,283		$	1,182
	740-759		961			712			377
	720-739		672			473			422
	700-719		541			411			242
	680-699		308			245			203
	< =679		196			130			123
Total		$	5,838		$	4,254		$	2,549


Primary NIW by LTV		Three months ended
		June 30, 2016			March 31, 2016			June 30, 2015
		(In Millions)
	95.01% and above	$	362		$	209		$	84
	90.01% to 95.00%		2,633			1,816			1,149
	85.01% to 90.00%		1,732			1,420			842
	85.00% and below		1,111			809			474
Total		$	5,838		$	4,254		$	2,549


Primary NIW by purchase/refinance mix		Three months ended
		June 30, 2016			March 31, 2016			June 30, 2015
		(In Millions)
	Purchase	$	4,199		$	2,919		$	1,619
	Refinance		1,639			1,335			930
Total		$	5,838		$	4,254		$	2,549


The tables below show the primary weighted average FICO and the weighted average loan-to-value ratio (LTV), by policy type, for NIW in the quarters presented.

Weighted Average FICO
		June 30, 2016			March 31, 2016			June 30, 2015
Monthly			752			753			742
Single			762			759			760


Weighted Average LTV
		June 30, 2016			March 31, 2016			June 30, 2015
Monthly			92	%		92	%		92	%
Single			91			91			91



The table below reflects a summary of our primary IIF and RIF by book year.


Primary IIF and RIF				As of June 30, 2016
				IIF		RIF
				(In Millions)
June 30, 2016				$	9,951	$	2,393
2015					11,348		2,762
2014					2,266		552
2013					59		14
Total				$	23,624	$	5,721

The tables below reflect our total primary IIF and RIF by FICO, average loan size, LTV, and loan type.

Primary IIF by FICO		As of
		June 30, 2016		March 31, 2016		June 30, 2015
		(In Millions)
	> = 760	$	11,929	$	9,146	$	3,323
	740-759		3,876		3,045		1,153
	720-739		3,082		2,515		1,109
	700-719		2,341		1,877		706
	680-699		1,561		1,305		595
	< =679		835		676		304
Total		$	23,624	$	18,564	$	7,190


Primary RIF by FICO		As of
		June 30, 2016		March 31, 2016		June 30, 2015
		(In Millions)
	> = 760	$	2,895	$	2,206	$	772
	740-759		951		747		276
	720-739		750		614		273
	700-719		566		453		173
	680-699		369		312		147
	< =679		190		155		74
Total		$	5,721	$	4,487	$	1,715


Primary Average Loan Size by FICO		As of
		June 30, 2016		March 31, 2016		June 30, 2015
		(In Millions)
	> = 760	$	249	$	247	$	241
	740-759		239		237		233
	720-739		234		232		227
	700-719		232		229		221
	680-699		223		220		217
	< =679		209		206		205




Primary IIF by LTV						As of
			June 30, 2016			March 31, 2016			June 30, 2015
			(In Millions)
	95.01% and above		$	1,049		$	699		$	122
	90.01% to 95.00%			10,574			8,220			3,132
	85.01% to 90.00%			7,754			6,326			2,534
	85.00% and below			4,247			3,319			1,402
Total			$	23,624		$	18,564		$	7,190


Primary RIF by LTV						As of
			June 30, 2016			March 31, 2016			June 30, 2015
			(In Millions)
	95.01% and above		$	293		$	196		$	36
	90.01% to 95.00%			3,116			2,423			927
	85.01% to 90.00%			1,838			1,498			598
	85.00% and below			474			370			154
Total			$	5,721		$	4,487		$	1,715


Primary RIF by Loan Type						As of
			June 30, 2016			March 31, 2016			June 30, 2015

	Fixed			98	%		98	%		97	%
	Adjustable rate mortgages:
		Less than five years		-			-			-
		Five years and longer		2			2			3
Total				100	%		100	%		100	%



As of June 30, 2016 and June 30, 2015, 100% of our pool IIF and RIF was comprised of insurance on fixed rate mortgages.

The table below reflects a summary of the change in total primary IIF for the following periods.

Primary IIF		Three months ended
		June 30, 2016			March 31, 2016			June 30, 2015
		(In Millions)
IIF, beginning of period		$	18,564		$	14,824		$	4,835
	NIW		5,838			4,254			2,548
	Cancellations and other reductions		(778	)		(514	)		(193	)
IIF, end of period		$	23,624		$	18,564		$	7,190



Geographic Dispersion

The following table shows the distribution by state of our primary RIF.

Top 10 primary RIF by state	As of
	June 30, 2016		March 31, 2016		June 30, 2015
California	13.0	%	13.2	%	13.6	%
Texas	6.8		6.8		7.4
Virginia	6.4		5.8		5.3
Florida	5.0		5.3		4.8
Colorado	4.1		4.3		4.2
Michigan	4.1		4.1		3.6
Arizona	3.8		3.8		3.7
Pennsylvania	3.5		3.5		3.3
Maryland	3.4		3.6		3.5
North Carolina	3.4		3.1		2.1
Total	53.5	%	53.5	%	51.5	%

The following table shows portfolio data by origination year.


Origination year	As of June 30, 2016
	Original Insurance Written		Remaining Insurance in Force		% Remaining of Original Insurance		Policies Ever in Force	Number of Policies in Force	Number of Loans in Default	# of Claims Paid	Incurred Loss Ratio (Inception to Date) ⁽¹⁾		Cumulative default rate ⁽²⁾
	($ Values in Millions)
2013	$	162	$	59	36	%	655	289	-	1	-	%	0.2	%
2014		3,451		2,266	66	%	14,786	10,640	30	2	2.0	%	-	%
2015		12,422		11,348	91	%	52,550	49,180	47	2	1.9	%	0.4	%
2016 (through June 30)		10,092		9,951	99	%	40,862	40,438	2	-	0.2	%	-	%
Total	$	26,127	$	23,624			108,853	100,547	79	5

⁽¹⁾		The ratio of total losses incurred (paid and reserved) divided by the total premiums earned.
⁽²⁾		The sum of claims paid ever to date and notices of default as of the end of the period divided by policies ever in force.



The following table provides a reconciliation of the beginning and ending reserve balances for primary insurance claims and claims expenses:

			Three months ended						Six months ended
			June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
			(In Thousands)
Beginning balance			$	1,137		$	187		$	679		$	83

Add claims incurred:
	Claims and claim expenses incurred:
		Current year		560			59			1,113			139
		Prior years		(90	)		(65	)		(185	)		(41	)
Total claims and claims expenses incurred				470			(6	)		928			98

Less claims paid:
	Claims and claim expenses paid:
		Current year		-			-			-			-
		Prior years		132			-			132			-
Total claims and claim expenses paid				132			-			132			-

Balance, June 30			$	1,475		$	181		$	1,475		$	181



The following table provides a reconciliation of the beginning and ending count of loans in default.

	Three months ended						Six months ended
	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
Beginning default inventory		55			6			36			4
Plus: new defaults		50			5			89			10
Less: cures		(23	)		(2	)		(43	)		(5	)
Less: claims paid		(3	)		-			(3	)		-
Ending default inventory		79			9			79			9


The following tables provide details of our claims and reserves.

	Three months ended						Six months ended
	June 30, 2016			June 30, 2015			June 30, 2016			June 30, 2015
	($ Values In Thousands)
Number of claims paid		3			-			3			-
Total amount paid for claims	$	132		$	-		$	132		$	-
Average amount paid per claim	$	44		$	-		$	44		$	-
Severity		71	%		-			71	%		-

Average reserve per default:	As of June 30, 2016		As of June 30, 2015
	(In Thousands)
Case	$	17	$	19
IBNR		1		1
Total	$	18	$	20



The following table provides a trended comparison of the PMIERs financial requirements as reported by National MI.

	As of
	June 30, 2016			March 31, 2016			June 30, 2015
					(In thousands	)
Available Assets	$	432,074		$	434,138		$	431,411
Risk-Based Required Assets		377,468			302,852			249,805

Asset charge % ⁽¹⁾		6.10	%		6.12	%		6.17	%


⁽¹⁾		Asset charge represents the risk based required asset amount divided by the outstanding RIF on performing primary loans.

Contact Information:

Investor Contact
John M. Swenson
Vice President, Investor Relations and Treasury
john.swenson@nationalmi.com
(510) 788-8417

Press Contact
Mary McGarity
Strategic Vantage Mortgage Public Relations
(203) 513-2721
MaryMcGarity@StrategicVantage.com

NMI Holdings, Inc. Reports Second Quarter Net Income of $2 Million, Enters Into Reinsurance Treaty to Support Growth